"We both know that ex div, the SP will generally fall by greater than the SP, and as you have noted, existing holdings have already been diluted by not only the pullback in price, but also the dilution factor of the extra shares issued."
1) the expected fall in SP will be the dividend plus the imputation credit it attracts. Very few shares see a greater fall than that
2) the extra shares issed do not represent 'dilution' since they are bought from the raised capital
3) the pullback in price will normally be temporary because the new capital will be invested as well as the old capital and so produce equivalent dividends. If that stops happening then the LIC will quickly lose value, as it will if the existing 'retained' shares and their capital start producing reduced profits.
These CR's from Wilson provide holders with a beneficial opportunity to get extra shares at a discount to the current price (pre-announcement) and the premium will soon return if the extra capital is invested as well as the existing capital.
(20min delay)